Reform UK’s former deputy leader Ben Habib has issued a stark warning that the UK is heading towards a sovereign debt crisis within the next six to nine months.
Habib’s comments came after the Office for National Statistics (ONS) revised its previous growth estimates, revealing the UK economy stagnated between July and September.
The statistics watchdog had initially reported 0.1 per cent growth for the third quarter, but latest figures show the economy flatlined.
Liz McKeown, ONS director of economic statistics, noted that “bars and restaurants, legal firms and advertising, in particular, are performing less well”.
Habib criticised Chancellor Rachel Reeves following the latest economy figures
GB News / PA
Speaking to GB News, Habib predicted a combination of factors including a weakening pound, imported inflation and high interest rates would create a “downward spiral”.
He warned this would make it increasingly difficult for the Government to finance its own needs, leading to what he believes will be a full-blown sovereign debt crisis.
In his criticism of Government policy, Habib pointed to excessive taxation and regulation as key factors stifling economic growth.
“You don’t grow an economy by taxing it and over-regulating it,” he told GB News, highlighting that Britain now faces its highest tax burden as a proportion of GDP since World War Two.
Rachel Reeves’s budget is being blamed for driving growth expectations down to the weakest level in over two yearsGETTYAccording to Habib, these policies have already shown negative effects, with hiring “going through the floor” despite Government assurances that workers wouldn’t be impacted.
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Habib painted a grim picture of the UK’s economic trajectory, predicting multiple concurrent challenges ahead.
“We’re undoubtedly going into a recession,” he stated, warning this would be accompanied by a weakening pound and imported inflation.
The former Reform UK deputy leader argued this would have significant implications for government finances.
“I think we are facing, in six to nine months time, a sovereign debt crisis for the United Kingdom,” he warned.
Ben Habib told GB News that the UK is headed for a sovereign debt crisis within the next year
GB News
After the growth revision, the Chancellor defended her approach, arguing that the Government was focused on driving up “sustainable long-term growth” by reforming the economy.
“The challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge”, she said.
Reeves added: “The challenge we face to fix our economy and properly fund our public finances after 15 years of neglect is huge. But this is only fuelling our fire to deliver for working people.
“The Budget and our plan for change will deliver sustainable long-term growth, putting more money in people’s pockets through increased investment and relentless reform.”